Caojing Polycarbonate Production Facility, China

The Caojing polycarbonate project is Bayer's biggest investment in China to date. It is a world-scale production facility located in north eastern China. The plant is sited at the Shanghai Chemical Industry Park.

The plant is owned by a joint venture between Bayer, which provided 90% of the capital investment, and the Shanghai Chloralkali Company (which provided the rest).

The capital investment proportions also reflect the partners' equity. The Chinese partner also provided the land for the production site.

Makrolon thermoplastic plant

"The Caojing polycarbonate project is Bayer's biggest investment in China to date. It is a world-scale production facility."

The project was initiated when the two partners signed a letter of intent at a ceremony in Beijing in November 1999. The cost of the plant was $450 million.

The plant was eventually able to make about 100,000t/yr of the thermoplastic, mainly for the local market. The brand name for the product is Makrolon. It is used in the manufacturing of car headlights, roofing, glazing, DVDs and CDs.

Makrolon is also used to produce Bayblend PC/ABS copolymer for applications such as monitor and television housings. The facility includes a bisphenol A plant and basic infrastructure.

However, this goal was reached in two phases of investment. In the first phase, the joint venture built a 40,000t/yr polycarbonates facility. In the second phase, the 60,000t/yr facility was expanded to the intended full capacity of 100,000t/yr.

The first phase went into commercial operation in June 2005. Construction of the second phase began immediately upon completion of the first.

The full capacity of the plant was reached in the first half of 2006. In that year, the Chinese plant also produced roughly 40% of the company's total Asian polycarbonate capacity.

In 2008, Bayer expanded the polycarbonates and blends production at the site by another 100,000t/yr.

The other facilities of Bayer on the Caojing site include a 350,000t/yr methylene diphenyl diisocyanate (MDI) and a 300,000t/yr toluene di-isocyanate (TDI) production facilities. TDI and MDI are used as raw materials for polyurethane.

Polymer technical service plant

In 2000, Bayer announced another stage in Caojing's development. The German firm stated it would be opening a technical service centre for polymers in Shanghai.

This is intended to complement and support the company's other facilities in the region, especially at the Caojing site.

In addition to its function as a technical centre, the development is expected to act as a customer interface. The cost of this technical and customer centre (to Bayer) was about $9.5m.

Caojing: seminal for future growth, and Bayer's continued investment in China

The polycarbonates plant was the first step towards a fully integrated plastics and chemicals production centre in Caojing.

"China is of enormous importance to the Bayer plastics group. The company has 12 joint ventures in the country."

Bayer has also established units for the production of coating raw materials and plans other chemicals and synthetic rubber facilities in Caojing.

A cluster of plants would allow improved efficiency as the complex exploited economies of scale. The Caojing site is also Bayer's central hub for north eastern Asia.

Another sign of the site's importance to Bayer was its relocation of its Chinese headquarters from Hong Kong to Caojing.

China is of enormous importance to the Bayer plastics group. The company has 12 joint ventures in the country and has invested $4.5bn in the region. Of this, $2.5bn was spent on the plants.

The programme increased Bayer Asian sales to about 25% of the total by 2010. The substances produced at Bayer's plants have numerous applications in the domestic automotive, appliances, electronics, construction, shoe and furniture industries.